Private home rents recover with 1% rise in Q1; vacancy rate dips to 6.3%

Rents of private residential properties rose 1 per cent in the first quarter of this year from the previous three months, reversing a 1 per cent fall in the previous quarter, according to data from the Urban Redevelopment Authority (URA) released yesterday morning.

Rents of landed properties increased by 0.2 per cent in the January-to-March quarter, compared with the 2.1 per cent drop in the previous quarter. Rents of non-landed properties increased by 1.1 per cent, compared with the 0.8 per cent decline in the previous quarter.

The vacancy rate of completed private residential units (excluding executive condos) dipped to 6.3 per cent at the end of the first quarter of this year, down a notch from 6.4 per cent in the previous quarter.

Ms Christine Sun, head of research and consultancy for OrangeTee & Tie, pointed to rent recovery for non-landed homes in the prime areas or core central region, with a quarter-on-quarter rise of 1.6 per cent, as well as in the suburbs or outside the central region, which saw a 1.7 per cent quarter-on-quarter increase.

She noted that these were the highest increases seen since Q4 2010.

Another bright spot, she added, was a decrease in vacancy rates of completed private residential homes (excluding executive condos) for six consecutive quarters, to a five-year low of 6.3 per cent.

Ms Christine Li, head of research for Singapore and South-east Asia, Cushman & Wakefield, called the growth in overall private home rental a silver lining amid the fall in overall private residential prices.

"A recovering rental market could help support resale volume as some buyers become more yield-driven as compared to just focusing solely on capital gains," she said.

Ms Li added that the recovery of rents is underpinned by low completion volumes until 2021, with completions expected to peak in 2022 as 20,116 units enter the market.

A version of this article appeared in the print edition of The Straits Times on April 27, 2019, with the headline 'Private home rents recover with 1% rise in Q1; vacancy rate dips to 6.3%'. Print Edition | Subscribe